Honda 2008 Annual Report Download - page 74

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for measuring fair value in generally accepted accounting
principles, and expands disclosures about fair value
measurements. This statement applies under other
accounting pronouncements that require or permit fair
value measurements and does not require any new fair
value measurements. This statement is effective as of an
entity’s first fiscal year that begins after November 15,
2007. In February 2008, FASB issued FASB staff position
(FSP) No. FAS 157-2 “Effective date of FASB statement No.
157”. This FSP delays the effective date for SFAS No. 157,
for nonfinancial assets and nonfinancial liabilities, except for
items that are recognized or disclosed at fair value in the
financial statements on a recurring basis (at least annually).
It is not anticipated that adoption will have a material impact
on the Company’s consolidated financial position or results
of operations.
The Company and its subsidiaries adopted the
recognition and disclosure provisions of Statement of
Financial Accounting Standards (SFAS) No. 158, “Employers’
Accounting for Defined Benefit Pension and Other
Postretirement Plans – an amendment of FASB Statements
No. 87, 88, 106, and 132(R)” on March 31, 2007.
This statement also changes the date at which benefit
obligations are to be measured to the date of the year-end
statement of financial position. Certain foreign subsidiaries
of the Company use a December 31 measurement date for
their plans. The measurement provisions of this statement
are effective for fiscal years ending after December 15, 2008.
It is not anticipated that adoption will have a material impact
on the Company’s consolidated financial position or results
of operations.
In February 2007, the Financial Accounting Standards
Board (FASB) issued Statement of Financial Accounting
Standards (SFAS) No. 159, “The Fair Value Option for
Financial Assets and Financial Liabilities – including an
amendment of SFAS No. 115”. This statement permits
entities to choose to measure at fair value many financial
instruments and certain other items that are not currently
required to be measured at fair value. Subsequent changes
in fair value for designated items will be required to be
reported in earnings in the current period. The statement
also establishes presentation and disclosure requirements
for similar types of assets and liabilities measured at fair
value. The statement is effective for financial statements
issued for fiscal years beginning after November 15, 2007.
Honda is currently in the process of assessing the financial
impact of adoption.
In December 2007, the Financial Accounting Standards
Board (FASB) issued Statement of Financial Accounting
Standards (SFAS) No. 141(R), “Business Combinations”. This
statement replaces SFAS No. 141. This statement requires
an acquirer to recognize the assets acquired, liabilities
assumed, and any noncontrolling interest in the acquiree at
the acquisition date measured at that date. The statement
shall be applied prospectively to business combinations for
which the acquisition date is on and after an entity’s first
fiscal year that begins after December 15, 2008, with early
adoption not permitted. It is not anticipated that adoption
will have a material impact on the Company’s consolidated
financial position or results of operations.
In December 2007, the Financial Accounting Standards
Board (FASB) issued Statement of Financial Accounting
Standards (SFAS) No. 160, “Noncontrolling Interests in
Consolidated Financial Statements”. This statement
requires that a noncontrolling interest in a subsidiary is an
ownership interest in the consolidated entity that should be
reported as equity in the consolidated financial statements,
and requires that changes in a parent’s ownership interest
while the parent retains its controlling financial interest in its
subsidiary shall be accounted for as equity transactions.
This statement is effective as of an entity’s first fiscal year
that begins after December 15, 2008, with early adoption
not permitted. It is not anticipated that the initial adoption
will have a material impact on the Company’s consolidated
financial position or results of operations.
(u) Cumulative Effect of Prior Year Adjustments
In September 2006, the Securities and Exchange
Commission (SEC) issued Staff Accounting Bulletin No.
108, “Considering the Effects of Prior Year Misstatements
when Quantifying Misstatements in Current Year Financial
Statements” (“SAB No. 108”). SAB No. 108 provides
interpretive guidance on how the effects of the carryover or
reversal of prior year misstatements should be considered
in quantifying current year misstatements for the purpose of
materiality assessment. SAB No. 108 requires that registrants
quantify a current year misstatement using an approach that
considers both the impact of prior year misstatements that
remain on the balance sheet and those that were recorded in
the current year income statement. The Company historically
quantified misstatements and assessed materiality based on
a current year income statement approach. The transition
provisions of SAB No. 108 permit the Company to adjust for
the cumulative effect on retained earnings of immaterial errors
related to prior years.
The Company adopted SAB No. 108 effective
beginning of the fiscal year ended March 31, 2007, and
adjusted the items described below in the accompanying
consolidated financial statements as of the beginning of the
fiscal year ended March 31, 2007 to correct the prior year
misstatements, which were considered to be immaterial to
the consolidated statements of income and consolidated